Azerbaijan’s participation in the upcoming OPEC meeting is good news for its citizens and business circles, Doctor of Economics, Professor of Russia’s St. Petersburg State University Stanislav Tkachenko told Trend.

The meeting will be held in the format of video conference on April 9.

According to him, Azerbaijan, like its neighboring Kazakhstan and Russia, is not a member of OPEC, but it will be invited for sure to the upcoming negotiations in the form of a video conference.

“A representative of Azerbaijan will be able to express his country’s opinion about the current events, as well as demonstrate the positive role that Baku plays in efforts to stabilize the global oil market. This is important for both partner states and foreign investors,” the professor noted.

The expert believes that presently, the global oil market can be balanced by putting end to almost month-long “price war” between Russia and Saudi Arabia.

“Ending of their confrontation and, at least, mutual rejection from verbal threats to fill the global market with oil in dumping prices will allow the price of a barrel of oil return to the $30-40 level. This in itself will be soothing news for oil producing countries, as well as for private oil companies in countries where state monopoly on oil production is absent," Tkachenko said.

At the same time, he called not to expect that Russia and Saudi Arabia will reach some kind of a broader agreement within the upcoming OPEC + meeting (in the form of a video conference).

“In particular, Russia won’t formally assume commitment to reduce the production by several million barrels of oil per day. I should remind that last week’s price collapse was stopped by Donald Trump’s Twitter messages about reducing oil production by 15 million barrels a day by OPEC and its partners, and the following statement of Russian President Vladimir Putin about plans to reduce the production only by 10 million barrels, and not “by Saudi Arabia and Russia,” as Trump insisted, but by all parties to the OPEC + deal,” the expert said.

Tkachenko believes that the current extremely low prices will remove a certain amount of oil from the markets in the coming weeks as a result of bankruptcies of individual companies.

“It will soon become clear to everyone, which is clear to professionals - Saudi Arabia is not able to realize its threats to increase oil production up to 13 million barrels, and exports - up to 10-11 million barrels per day," he said.

According to the expert forecasts, the 2016 deal, known as OPEC +, will be re-declared as effective in its previous volumes.

"But we won't see any specific figures, or moreover formal agreements on parallel cut of oil production by any significant volumes," the expert noted.

According to him, when analyzing this situation, it’s important to take into account the peculiarities of the US position.

"This state is not only the largest producer of oil (convenient and shale), but also its largest consumer in the world. Oil consumption in the US almost twice exceeds the production (approximately 18 million barrels of consumption versus 12 million barrels of production per day),” Tkachenko said.

“We can draw at least two conclusions from this: Firstly, the US won’t cut domestic production. The bankruptcy of shale oil companies, as well as the cut in the total number of operating oil rigs in this country, of course, will slightly reduce the production volume. But the federal authorities will not impose any "quotas" on the forced production cut by private companies. This would be a direct intervention of the authorities in business affairs, as well as the promotion of cartel conspiracy. Both are expressly prohibited in the US by the applicable law”.

“Secondly, the US can close its domestic market for imported oil, and the first candidate, of course, is the Russian Federation. At the beginning of this year, Russia sold even a little more oil on the US market than Saudi Arabia did (about 350,000 barrels per day). The US will threaten to impose a special tariff on Russian supplies, which will close the American market for a number of Russian companies,” the professor noted.

“But today it is impossible to imagine that, due to US threats, Russia will impose an embargo on the import of its oil into the US market, throw a white flag and, and as it’s said, lose its face. Since 2014, Russia has experienced even harder sanctions, so the threat of an import tariff will not frighten it," he added.